Case Study for Moon Bakery Case Study

Open, View, and/or
Download this Document

Total Length: 429 words ( 1 double-spaced pages)

Total Sources: 3

Moon Bakery Case Study – (Excel Template attached in different file)Based on the information provided in the case study, Moon Bakery should look to invest in the $350,000 machine. Here, the Net Present Value of the investment is positive indicated that the machine will add value to the business if the project is undertaken. Likewise, from the payback period analysis, the company should look to receive a payback on the investment in at least 3 to 4 years. This is beneficial as the machine is expect to be functional for at least six years.When reviewing the data, the risk of undertaking the project is low given the projected increases in revenue along with long duration of the asset being used. In addition, Jane may want to consider financing a portion of the purchase with debt. Here, the company has a very low cost of debt and very little leverage. By financing a portion of the purchase with debt, the company can lower the overall risk of the project and bring their overall cost of capital down. Based on the projections the current yield on the asset in Year 1 is 16%. This is calculated as the net income projected in…

[…… parts of this paper are missing, click here to view the entire document ]

…due to the machinery.

Stuck Writing Your "Case Study for Moon Bakery" Case Study?

View All Our Example Case Study for Moon Bakery Case Study

Have A Custom Example Essay Written

Overall, the company should undertake the project and invest in the machine. It first provides a limited competitive advantage as it increase efficiencies and revenues for the business. These revenues are justified by the positive NPV calculations as noted in the attached template. In addition, the payback period is relative short, thereby indicating a strong investment opportunity. Finally, through the use of debt, the company can profit from the current yield on the asset and its very low debt costs. By conservatively increasing leverage, the company will in turn, lower its cost of capital as well further justifying….....

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Case Study For Moon Bakery" (2022, February 20) Retrieved July 2, 2025, from
https://www.aceyourpaper.com/essays/moon-bakery-2182615

Latest MLA Format (8th edition)

Copy Reference
"Case Study For Moon Bakery" 20 February 2022. Web.2 July. 2025. <
https://www.aceyourpaper.com/essays/moon-bakery-2182615>

Latest Chicago Format (16th edition)

Copy Reference
"Case Study For Moon Bakery", 20 February 2022, Accessed.2 July. 2025,
https://www.aceyourpaper.com/essays/moon-bakery-2182615
   

Open, View, and/or
Download this Document
order custom essay example